Thursday, May 10, 2018

The map below (click to enlarge) was created (with assistance from AEI’s graphic design director Olivier Ballou) by matching the economic output (Gross Domestic Product) for each US state (and the District of Columbia) in 2017 to a foreign country with a comparable nominal GDP last year, usingdata from the BEA for GDP by US stateand data for GDP by country from theInternational Monetary Fund. For each US state (and the District of Columbia), we identified the country closest in economic size in 2017 (measured by nominal GDP) and those matching countries are displayed in the map and in the table below. Obviously, in some cases, the closest match was a country that produced slightly more, or slightly less, economic output in 2017 than a given US state.

It’s pretty difficult to even comprehend how ridiculously large the US economy is, and the map above helps putAmerica’s Gross Domestic Product (GDP) of $19.4 trillion ($19,400,000,000,000) in 2017into perspective by comparing the economic size (GDP) of individual US states to other country’s entire national output. For example:

America’s largest state economy is California, which produced $2.75 trillion of economic output in 2017, just slightly below the GDP of the United Kingdom last year of $2.62 trillion. Consider this:California has a labor force of 19.3 million compared to the labor force in the UK of 33.8 million (World Bank data here).Amazingly, it required a labor force 75 percent larger (and 14.5 million more people) in the UK to produce the same economic output last year as California! That’s a testament to the superior, world-class productivity of the American worker. Further, California as a separate country would have been the 5th largest economy in the world last year, ahead of the UK ($2.62 trillion), India ($2.61 trillion) and France ($2.58 trillion).

America’s second largest state economy—Texas—produced nearly $1.7 trillion of economic output in 2017, which would have ranked theLone Star State as the world’s 10th largest economy last year. GDP in Texas was slightly higher than Canada’s GDP last year of $1.65 trillion. However, to produce about the same amount of economic output as Texas required a labor force in Canada (20 million) that was nearly 50 percent larger than the labor force in the state of Texas (13.5 million). That is, it required a labor force of 6.5 million more workers in Canada to produce roughly the same output as Texas last year. Another example of the world-class productivity of the American workforce.

Even with all of its oil wealth,Saudi Arabia’sGDP in 2017 at $683 billion was below the GDP of US states likePennsylvania ($752 billion) and Illinois ($820 billion).

America’s third largest state economy—New Yorkwith a GDP in 2017 of $1.55 trillion—produced slightly more economic output last year than South Korea ($1.54 trillion). As a separate country, New York would have ranked as the world’s 11th largest economy last year, ahead of No. 12 South Korea, No. 13 Russia ($1.53 trillion) and No. 14 Australia ($1.38 trillion). Amazingly, it required a labor force in South Korea of 27.9 million that was nearly three times larger than New York’s (9.7 million) to produce roughly the same amount of economic output last year! More evidence of the world-class productivity of American workers.

Other comparisons:Florida($967 billion) produced almost the same amount of GDP in 2017 as Indonesia ($1 trillion), even though Florida’s labor force of 10.1 million is less than 8 percent of the size of Indonesia’s workforce of 127.1 million. GDP inIllinoislast year of $820 billion was just slightly higher than economic output in the Netherlands ($825 billion), even though the labor force in Illinois (6.5 million workers) is 28 percent smaller than the labor force in the Netherlands (9 million workers).

Overall, the US produced 24.3 percent of world GDP in 2017, with only about 4.3 percent of the world’s population. Three of America’s states (California, Texas and New York)—as separate countries—would have ranked in the world’s top 11 largest economies last year. Together, those three US states produced nearly$6.0 trillion in economic output last year, and as a separate country would have ranked as theworld’s third-largest economy and ahead of No. 4 Japan ($4.8 trillion) by more than $1 trillion. And one of those states—California—produced more than $2.7 trillion in economic output in 2017—and the other two (Texas and New York) produced $1.7 trillion and $1.5 trillion of GDP in 2017 respectively.

Adjusted for the size of the workforce, there might not be any country in the world that produces as much output per worker as the US, thanks to the world-class productivity of the American workforce. The map above and the statistics summarized here help remind us of the enormity of the economic powerhouse we live and work in. So let’s not lose sight of how ridiculously large and powerful the US economy is, and how much wealth, output, and prosperity is being created every day in the largest economic engine there has ever been in human history.

click to enlarge

Special thanks to Kevin Kiefer for assistance with the data collection for this post.